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Recognizing Workforce STARs a Competitive Advantage

Published May 26, 2022 by Susan Moore

Click above to watch the UpSkill Works Forum "Skilled Talent = Workforce STARs"

Click above to watch the UpSkill Works Forum "Talent With Skills = Workforce STARs""

There’s a tendency in the United States to think of workers with bachelor’s degrees and other advanced degrees as skilled talent and those without as low-skill workers. But that’s not the case – and conflating the two has kept millions of Americans from accessing middle-wage jobs and caused employers to miss out on good talent.

More than 70 million American workers gained the knowledge, skills, and abilities to succeed in critical areas of the workforce without earning a bachelor’s degree. These Americans are skilled through alternative routes (STARs) such as community college, military service, intensive training programs like coding bootcamps, and on-the-job training. They’re a skilled and adaptive workforce, the kind employers say they need, but STARs across the economy are often overlooked for, or systematically excluded or displaced from, good job opportunities because they lack a bachelor’s degree.

STARs or other workers without a bachelor’s degree make up about 60 percent of greater Houston’s adult population, based on current educational outcomes, and represent enormous potential for employers needing to fill key jobs and for Houston’s economic recovery, general growth, and long-term stability.

The research-driven nonprofit Opportunity@Work helps companies develop strategies to look beyond degrees and hire STARS. During an UpSkill Works Forum held in April, its co-founder and CEO Byron Auguste shared how re-thinking recruiting, hiring, and promotion practices to leverage STAR talent can benefit employers, STARs themselves, and the regional economy as a whole.

“Companies that figure this out are going to be winning in this talent pool and other companies that don't bother are going to see much more churn, and they're actually going to pay a cost that they don't yet realize,” he said.

Additionally, communities and metro areas that characterize the STAR talent pool and the availability of multiple pathways to build skills as assets will be able to attract headquarters, he said, and boost economic development in the long run.

“I believe that will be a basis of competitive advantage and it's something that a city like Houston should be looking at,” he said.

 

Recognizing Workforce STARs

Nationally, STARs are the middle class. STARs account for half of all white workers, nearly 60 percent of Hispanic workers, over 60 percent of Black workers, more than 60 percent of military veterans and nearly 90 percent of enlisted veterans, according to Opportunity@Work. Nearly 70 percent of American workers in rural settings (of all backgrounds) are STARs.

One in three adults over the age of 25 in the Houston region holds a bachelor’s degree or higher; the ratio is much lower for Hispanic and Black adults. Roughly 24 percent of area adults are high school graduates (or equivalent) but have not attended college, while 28 percent have attended some college or hold an associate degree. Another 15 percent have not completed high school. Meanwhile, upwards of 70 percent of jobs now and in the future will require education and skills beyond a high school diploma.

 

STARs Have Lost Ground in Economic Opportunity

Over the last 20 years, STARs were displaced from 7.4 million middle- and high-wage jobs due in-part to increased employment requirements of a bachelor’s degree, according to Opportunity@Work. Around half of these losses came from 30 key occupations where workers could gain the necessary skills for the job through an alternative, non-bachelor’s degree route, such as registered nurse, secretary and administrative assistant, and office supervisor. Opportunity@Work’s analysis of wage data shows that it takes a STAR a staggering 33 years to reach the starting wage of a recent college graduate with a bachelor’s degree. Auguste argued that had STARs been able to keep their fair share of these jobs, then 7.4 million American workers – middle class workers – would have better paying jobs. And focusing on skills to fill these jobs, rather than pedigrees, is one way to make these jobs more accessible going forward.

“We need a system that doesn't spend so much money and time trying to pre-decide who gets to try and we need a system that allows everyone to put their best foot forward and get as far as they can,” he said.

 

Job Adjacent Skills Can Drive Mobility

According to Opportunity@Work data analysis, the overlap of skills between lower- and middle-wage jobs is so great that 32 million STARs – or 45 percent of STARs – have the skills for jobs that offer significant wage gains more than their current jobs, he said.

Auguste illustrated skill adjacencies and overlaps between some lower wage and higher wage jobs to indicate potential mobility between lower-wage work and higher-wage work. For example, retail salespeople and sales representatives utilize many of the same skills, but one earns less pay and is accessible to a STAR while the other, higher-paying role is less accessible.

Skills Distance: 1.63

Source: Opportunity@Work analysis of O*NET and 2010-2019 Current Population Survey

Opportunity@Work Preliminary Findings, August 2020.

In 2020, a Federal Reserve Banks of Philadelphia and Cleveland analysis of millions of job postings showed that 49 percent of lower-wage employment could be paired with at least one higher-paying occupation that required similar skills. The Banks built an occupational mobility exploration tool that illustrates top in-demand skills compared across occupations that jobseekers and career coaches can use to identify occupations that require similar skills and map viable transitions from lower-wage work to these higher-paying roles. Employers can use it, too, to explore pathways that could exist within their own organizations. The tool shows top transitions in the Houston-The-Woodlands-Sugar Land, Dallas-Fort Worth-Arlington, Austin-Round Rock, and San Antonio-New Braunfels metro areas, meaning it can help thousands of Texas STARs and Texas employers recognize this opportunity.

Genuine skills gaps exist in specialized fields but for the most part, Auguste said, there are plenty of people with the skills needed to fill open middle-wage jobs: employers are just looking in the wrong place.

For STARs to see these jobs, and for employers to attract talent with the right skills, it will be important for employers to signal the skills they actually need in their workforce. If employers only highlight degrees or specific work experience, then, he said, “the STAR doesn't need a skills description, they need a time machine.”

 

Increased Recognition of the Value of Skills

The tide is turning. Organizations are increasingly recognizing the value of STARs in their workforce along with the bachelor’s degree requirement as a barrier for entry for talent they want and need.

In March 2022, Maryland announced it was dropping the four-year college degree requirement for thousands of state jobs in IT, administrative work, and customer service areas. Instead, equal weight will be given to other qualifications such as relevant experiences, training, or community college education. Major corporations including Archer Daniels Midland, McKinsey & Company, and Toyota have joined the Markle Foundation’s Rework America Business Network to share effective skills-based recruiting and hiring practices. Meanwhile, the non-profit OneTen is gathering commitments from companies such as Deloitte, Dow, and Wells Fargo toward its 10-year goal to have one million Black workers without college degrees hired, promoted, or advanced into jobs with family-sustaining incomes.

Apprenticeships have gained ground for occupations and industries well outside of specific trade and craft roles in construction, manufacturing, and production where they have been used for decades to train new workers. Employers from Microsoft to Accenture have turned to apprenticeships to bring in new talent – without bachelor’s degrees – across data- and technology-based business functions. Locally, the Greater Houston Apprentice Network (GHAN), launched in 2021 by Accenture and Aon with support from the Partnership, can help employers design and implement apprenticeship programs. Founding partners include Accenture, Aon, Dow Chemical, Texas Mutual Insurance Company, the University of Texas MD Anderson Cancer Center, and Worley.

The Houston-based nonprofit NextOp helps employers understand the skills and experience that veterans and military STARs bring to the civilian workforce and prevent them from being inadvertently excluded from candidate pools. And companies across the region have partnered with other nonprofits to build programs to build digital skills among new and incumbent employees.

Auguste noted disparities in upward economic mobility based on gender and race: Female STARs are only half as likely as male STARs to make a wage gain when they make a job transition based on skills, and Black STARs are only half as likely as white STARs to transition upward. The Partnership can help companies advance a more equitable and diverse workforce through its One Houston Together initiative. With a national STARs workforce more than 70 million strong, we need to recognize it for what it is: talent.

"If you don't have a STARs strategy, you don't really have a complete human capital strategy [or a] a complete talent sourcing strategy," Auguste said.

 

The Partnership’s UpSkill Houston initiative works to strengthen the talent pipeline employers need to grow their businesses and to help all Houstonians build relevant skills and connect to good careers that increase their economic opportunity and mobility. Learn more.

The UpSkill Works Forum series presents conversations with regional business, education, and community leaders; policy makers; and high-profile thought leaders on the key workforce issues the greater Houston region confronts. See all past forums here.